The U.S. dollar, despite performing relatively well against most currencies overall today, was unable to resume its upward momentum against the Mexican peso and the Canadian dollar. Recall that at the beginning of the week, these currencies were losing momentum after the announcement of plans by the new Donald Trump government to increase tariffs on trade with these countries.Ā
The president-elect indicated that one of his first decisions will be to impose a 25% tariff on all products arriving from Mexico and Canada. In addition to this, Trump wants to impose an additional 10% tariff on all products from China, over and above those tariffs that are currently or will be imposed at a later date.Ā
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At the moment, the MXN negates all the upward momentum we saw on the USDMXN pair on Tuesday. However, this does not change the fact that the pair maintains a strong uptrend in the long term, which can theoretically be extended as long as the FED keeps rates at elevated levels for more time and Trump himself actually implements a strongly protectionist economic-trade policy. Source: xStationĀ
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